Nigerian Exchange Experiences Continued Decline Amid Weak Investor Sentiment

On Thursday, the Nigerian Exchange (NGX) saw the All-Share Index decline by 0.05% for the fifth consecutive trading session, driven by sell-offs in key banks. Market capitalisation fell to N65.75 trillion, reflecting ongoing weak investor sentiment and reduced transaction activity. Significant losses were observed in the banking sector, while mixed performances characterized other sectors.

At the conclusion of trading on Thursday at the Nigerian Exchange (NGX), the local stock market showed a continued decline as the All-Share Index decreased by 0.05 percent, landing at 104,858.77 basis points. This marks the fifth consecutive day of losses, primarily influenced by sell-offs in Zenith Bank and Access Holdings, contributing to the overall downturn of the market.

The market capitalisation experienced a decline of 0.05 percent, amounting to N65.75 trillion, which reflects a loss of N35.3 billion in equities at the close of the session. Consequently, the Month-to-Date and Year-to-Date returns also decreased, now at -2.8 percent and +1.9 percent, respectively.

Investor sentiment has remained negative, as evidenced by the market breadth, which reported only 14 advancing stocks against 28 decliners. Among the gainers were Computer Warehouse Group, Veritas Capital, and Wema Bank, while Livestock Feeds and Royal Exchange featured prominently on the losers’ list.

Sector performance was largely stagnant, with slight gains in the Insurance and Consumer Goods sectors at 0.13 percent and 0.39 percent, respectively, while the banking sector saw a reduction of 0.43 percent. The Oil/Gas, Industrial Goods, and Commodity sectors maintained flat performance at 0 percent.

Trading activity was notably slow, with a 15.23 percent decrease in the number of deals, alongside significant reductions in total transaction volume and value, which fell by 77.28 percent and 49.51 percent, respectively. A total of 10,182 transactions were recorded, resulting in N6.25 billion in value and 310.53 million units traded. Fidelity Bank emerged as the most traded stock by volume, while Zenith Bank led in value traded.

In summary, the Nigerian Exchange continued its downward trend, reflective of weak investor sentiment and sell-offs, particularly in key banking stocks. The market has shown diminished activity alongside falling capitalisation and returns, highlighting concerns regarding investor confidence. As trading remains subdued, a potential recovery appears uncertain amid the prevailing conditions.

Original Source: www.zawya.com